A Profit-Maximizing Firm Will

question 146

Multiple Choice

A profit-maximizing firm will

• A)expand employment if marginal revenue product equals marginal resource cost.
• B)reduce employment if marginal revenue product equals marginal resource cost.
• C)reduce employment if marginal revenue product is less than marginal resource cost.
• D)expand employment if marginal revenue product is less than marginal resource cost.

---

Definitions:

Unlimited Demand

A market scenario where the desire for a product surpasses the available supply at any price.

Constrained Resource

A limiting factor or scarce resource in a production process that restricts the company's ability to meet demand.

Current Profitability

A measure of the current efficiency and performance of a business in generating profit, often assessed over a short-term period.

Constrained Resource

Refers to a limited factor that restricts a company's ability to produce goods or services, such as a machine with finite capacity or limited labor.